Several states, including Western ones with rich mining histories, have been stockpiling gold as part of their broader state savings. And more states are looking to follow the lead of Texas and Florida by passing so-called transactional gold laws that would invite consumers to save and spend gold through their own accounts.
Critics question the need for these bills and some have panned them as potentially market-disrupting measures that could ultimately provide tax havens for the wealthy. But proponents say they can help bring gold to the masses and provide ordinary consumers an important protection against the creep of inflation, since gold has generally increased in value over time.
“Inflation is the carbon monoxide that you can’t see, taste or smell,” said Georgia state Sen. Marty Harbin, a Republican who sponsored bipartisan legislation this year that would have established gold and silver as legal tender and created an electronic payment system.
The state Senate approved that bill but it didn’t advance beyond a House committee. Harbin said he expects to reintroduce it next session.
Oklahoma lawmakers are considering a similar measure that would create an electronic payment system backed by gold. Lawmakers in several states, including Arizona, Iowa and Mississippi, considered such legislation this year.
After vetoing a similar bill last year, Utah Republican Gov. Spencer Cox allowed a gold measure to become law this year without his signature. He said the legislature appeared intent on passing the bill despite his misgivings.
“Many are concerned that this will result in unwelcome government involvement in the gold market,” he wrote in a statement late last month.
As part of transactional gold legislation, proponents are pushing for tax exemptions for precious metals, namely gold and silver. While interest on savings accounts or earnings on stock investments can be subject to state and federal taxes, gold proponents say precious metals should be free of tax because of their history as legal currency.
Matthew Gardner, a senior fellow at the left-leaning Institute on Taxation and Economic Policy, said there’s no reason gold should be taxed differently from other investment holdings. Governments generally provide capital gains tax breaks in hopes of spurring activities that grow the economy or create jobs. But Gardner said holding gold or other collectibles does no such thing.
“This as an economic activity has virtually no social benefits whatsoever,” Gardner said. “You’re trading a Pokémon card, basically.”
If rising costs are the main concern, Gardner said, lawmakers should tackle inflation directly.
“Most people don’t have the luxury of investing anything in gold,” he said. “It’s hard to imagine a way of inflation-proofing people’s lives that is less accessible to most Americans than doing it with gold.”
Gold for the Masses
The more Georgia Democratic state Sen. Sonya Halpern learned about transactional gold systems, the more appealing the idea became. While anyone can buy, hold or sell gold objects, she said emerging technology platforms allow consumers to own smaller shares of gold and spend it easily by swiping a card.
“It really does give you that instant liquidity of whatever gold holdings that you have,” she said.
A cosponsor of Harbin’s legislation, Halpern said she hoped gold could buffer Georgians against the shrinking buying power of the dollar. But she said she doesn’t see it as replacing traditional savings and spending methods.
“I personally think that most people would see it as a complement to whatever they’ve already got going for their savings,” she said, “and so it’s just a piece of their overall ability to save and protect the dollars that they’re working so hard to earn.”
In Georgia, proponents cited Glint, a British firm that has been pushing legislation across several states in recent years. The company makes gold spendable for consumers by issuing prepaid debit cards that are backed by physical holdings in Swiss vaults.
Customers use currency to fund their accounts in advance, and Glint says they then outright own the physical gold in their account. When they use their Glint card for a purchase, the equivalent amount of gold is sold on their behalf and converted to U.S. dollars, or another currency, that go to the merchant.
Harbin, the Republican sponsor in Georgia, held up his Glint card and described the ease of purchasing his lunch at Chick-fil-A.
“I saw that the proof of concept was there,” he told Stateline.
The Sound Money Defense League, a group that advocates for restoring gold and silver as America’s currency, has fought Harbin’s proposal and similar measures.
Jp Cortez, the group’s executive director, said the existing debit card system was actually evidence that the legislation was unnecessary.
“It’s not enabling anything that isn’t already legal,” said Cortez, whose organization is owned by Money Metals Exchange, an online broker for precious metals. “On top of that, the way these bills are written, frankly, read to me to be self-serving or written by self-interested vendors.”
Aside from boosting particular firms, Cortez said, legislation proposed in several states would create a new government program that would put off many gold owners, who tend to be suspicious of government. He said there’s also little demand to spend gold, which owners often view as a long-term asset that will gain value over time.
“The mentality of a gold owner is not one that says, ‘I want more government involvement in my gold,’” Cortez said.
In an email to Stateline, Glint COO Jason Ollivier said legislation is not necessary for consumers to use the platform, which has been operating in the United States for more than six years. But new state laws do help legitimize and scale the technology, he said.
“These laws aim to remove friction, particularly around legal tender status and regulatory clarity, and make gold more usable for everyday transactions across a broader population,” Ollivier wrote.
Inflation is driving the current wave of legislator interest, he said. And products such as Glint can provide consumers access to small amounts of gold, which currently trades for nearly $5,000 per ounce.
“Transactional gold allows consumers to accumulate small amounts over time, helping preserve purchasing power,” Ollivier wrote. “Gold is a hedge and a store of value, not a high-yield investment; its role is stability, not speculation.”
States Boosting Gold
In Utah, the law enacted this year without the governor’s signature requires the state to create a precious metals-backed electronic payment system to pay state vendors.
Utah State Treasurer Marlo Oaks said the system will be voluntary for state contractors, but officials hope it helps build out the emerging gold market.
“The idea, I think, is that if the state is involved in something like this, then it can add legitimacy to the idea,” he said. “And can hopefully put proper guardrails around this sort of thing and advance the market in a way that is positive and helpful.”
Oaks also said he hopes state involvement will help challenge federal tax policy.
In 1971, President Richard Nixon effectively ended the gold standard, which tied the value of the U.S. dollar to physical gold. After, the IRS began treating gold holdings like other collectibles, subject to income taxes upon sale.
“That’s an important element, because suddenly if you’re using (gold) like it used to be used, then we need to think about the treatment of taxes differently,” Oaks said.
He led a 2024 workgroup of Utah officials studying how precious metals could “bolster long-term fiscal stability.” In addition to inflation, the group examined how the ballooning federal debt consumes more tax revenues and could threaten state coffers.
A 2024 law allowed the treasurer to invest up to 10% of the state’s reserve funds at the time in gold. Oaks said Utah currently has about $1.4 billion in reserves, including about $178 million worth of gold held in a privately operated vault.
It’s among several states that are stockpiling gold. Created by 2015 legislation, the Texas Bullion Depository is the nation’s first state-administered precious metals depository, the Texas Comptroller of Public Accounts says. In Wyoming, a private firm is now storing state-owned gold worth millions of dollars, following enactment of a law last year.
Chris Colson, who researches payments trends at the Federal Reserve Bank of Atlanta, said it’s too early to tell how lasting the current gold rush will prove. He noted that new transactional gold laws do not require customers or merchants to use gold. But he said many details surrounding taxes, fees and oversight remain to be determined.
“With any good innovation, you don’t necessarily want to clamp it down at the beginning, because then nothing happens, right?” he said. “So I think as people use it and things happen — positive and negative — it’ll start to tighten up a little bit.”
He likens the rise of gold-backed payment systems to that of Stablecoin, a type of cryptocurrency tied to existing currency like the U.S. dollar. That form of payment is still relatively rare, but it did gain traction with adoption from major credit card companies.
“I would imagine this will follow a similar route, meaning someone will make it available, and then the market will kind of bear who and how it’s going to be used,” he said. “I think we’re just really at the starting line with this.”
This story first appeared in Stateline. Read the original here.
